Ferrofluid is a liquid that reacts to magnetism. It is attracted by magnets, pretty similar to iron. This can lead to areas where the liquid partly resists to gravitation when a magnet approaches. Thereby a small bump is formed close to the loadstone. This behavior is enabled by magnetic nano-particles that are suspended in a carrier fluid. Normally the particles are coated with a surfactant to prevent their agglomeration. This results in stable ferrofluid dispersions.
Snake + Oil = SnOil
There are different reasons, why an interesting application for the ferrofluid-display is based on the game Snake: the food pieces are shaped out of the surrounding fluid and are instantly converted to the snakes body after consumption. So the growth in length of the snakes tail comes along with a real swelling volume of the collected fluid. The snake on the screen is steered by a joystick or a keyboard whereas the input interface of SnOil relies on a straighter action: The player holds the whole ferrofluid-basin in his hands and controls the flow direction of the snake by slightly tilting in the according direction. The controller measures this by tilt-sensors.
See the video here.